How to Make Money with Intraday Trading

 

How to Make Money with Intraday Trading

 

The stock market is a well that can quench the thirst of the entire country. Nowadays, this dialogue is on everyone's lips. The reason is that people are earning millions and billions through the stock market. The craze for the market can be seen. During the time of the pandemic, when people were confined to their homes and had no means of employment, they were looking at their future through the resources they had, including the stock market. During this period, many people became millionaires who had acquired some knowledge of the stock market. In this article, we will provide information related to intraday trading.

How to Make Money with Intraday Trading

 

There are various types of trading in the stock market, such as delivery, intraday, futures and options, mutual funds, gold, Nifty, Nifty Bank, and so on. All of these have a vast field. Today, we will obtain information about intraday trading, which can be instrumental in making our intraday trading better.

 

What is Intraday Trading?

 

As we all know, there are various types of trading in the stock market, and one of them is intraday trading. In this type of trading, buying and selling of shares are done within a day. By studying the ups and downs of the market, you can engage in intraday trading. It is a cheap, simple, and effective technique through which you can earn a lot of money. Experienced individuals make substantial profits through intraday trading. This trading becomes even more profitable when there is news coverage that has the potential to impact the stock market. Significant earnings can be made within a day, provided you have experience in intraday trading.

 

How much money is needed for intraday trading?

To engage in intraday trading, you need a minimum amount of money depending on the stocks you wish to trade. Even if you have a small capital, you can still participate in intraday trading. Your broker provides leverage of up to 5 times your initial capital. For example, if you have ₹1000 for trading, your broker can offer you leverage up to ₹5000. In total, you have ₹6000 available for trading. Choose your stocks wisely, utilize leverage, and engage in trading.

It's important to note that the higher the profit potential, the higher the possibility of incurring significant losses. Therefore, it is crucial to exercise caution and be careful while trading.

 

How to choose stocks

 

The entire game in the stock market depends on stock selection. The bigger and better the stock, the higher the potential for earnings. In recent times, there have been several stocks involved in fraudulent activities whose main intention was to swindle the investors' money rather than conduct legitimate business. When selecting stocks, you can consider the following points:

1. Invest in stocks that you are familiar with.
2. Avoid investing in unknown stocks.
3. Conduct proper research on the company.
4. Check if the company is heavily indebted.
5. Study the company's past profits and how they rewarded their shareholders.
6. Study the company's performance in recent times.
7. Determine the company's future objectives.
8. Evaluate how the company's employees are performing.
9. Ensure that the company you have chosen is not blacklisted by any agency.
10. Obtain detailed information from regulatory bodies such as BSE (Bombay Stock Exchange) or NSE (National Stock Exchange).

 

 

What is leverage in intraday trading?

 

In the field of trading, you may have heard of the term "leverage" or be familiar with it. In simple terms, leverage refers to the invisible money provided by your broker, which is a multiple of your initial capital. In the past, it used to be as high as 20%, but currently, in intraday trading, you can obtain leverage of around 5%. To understand it in simple terms, if you have ₹1000, your broker can offer you 5 times leverage, making ₹6000 available for trading. The risk here is that while you can make multiplied profits, you can also incur losses in the same proportion. However, if you trade with ₹6000, your maximum loss will not exceed your initial capital of ₹1000.

 

What is the timing for intraday trading?

 

Generally, the market operates from 9:00 AM to 3:30 PM. However, the first 15 days are considered a stabilizing period for the market. Intraday trading starts at 9:15 AM and ends at 3:20 PM. If you do not complete your share purchase or sale by 3:20 PM, the broker will complete the transaction on your behalf, and you will be charged a brokerage fee of ₹50, along with separate taxes.

 

 

 

Can you become rich through intraday trading?

 

We come across numerous stories of people who have made fortunes in the stock market, which often fills us with greed and a desire to become wealthier and bigger than those who have earned money through share market trading. There are various types of trading in the stock market, one of which is intraday trading. With intraday trading, you can certainly make money, but it requires a substantial amount of capital, patience, and understanding of the market.

It is commonly observed that around 90% of people fail in intraday trading. They end up losing their capital because the market does not operate based on a single day's study. It is difficult to predict what will happen in the market or specifically in one share. You cannot exclude your own research in this regard.

Newcomers often venture into intraday trading with the hope of earning substantial profits. However, they usually lack the required capital to withstand the market's ups and downs. They are content with small profits and exit the market with significant losses, depleting their capital. The most significant issue here is that you have to pay approximately ₹130 per trade as broker charges, taxes, security transactions, and other fees. These small amounts gradually reduce your capital.

So, while it is possible to make money through intraday trading, it is essential to approach it with caution and understanding. It requires a substantial capital base, patience, research, and an understanding of market dynamics to increase the chances of success.

 

 

 

What is the formula for intraday trading?

 

If you are considering intraday trading, there are certain things you should keep in mind:

• Global Market: The market is influenced by global events. When a sense of fear prevails in the market due to global events, investors often feel apprehensive and refrain from investing their money. In such cases, it is crucial to have an understanding of the ups and downs of shares in the global market.
• Domestic Market: You should be aware of the current state of your own share market. Understand the active participants in the market and the continuous fluctuations in market trends. It is advisable to engage in intraday trading when the market is operating at a normal pace, as extreme volatility can affect your confidence.
• International and National Events: Prior to engaging in intraday trading, pay attention to national and international events that can impact the stock market. News related to major companies or events related to the nation can significantly influence the stock market.
• Company-related Information: Continuously keep yourself informed about the company in which you plan to do intraday trading. Stay updated on its investment activities, methodology, and other relevant information.
• Appropriate Knowledge of Market Trends: Before entering into intraday trading, it is important to have knowledge of how and when the shares of your trading company experience fluctuations, at what times, and under what circumstances. Understanding the percentage of these fluctuations is also crucial.
• Stable Shares and Avoidance of Market Manipulation: Conduct thorough research to ensure that the shares you intend to purchase exhibit consistent and appropriate fluctuations. It is believed that shares should flow like a river, meaning that they should have a certain degree of liquidity. Stable markets do not generate profits; it is the market's ups and downs that offer the opportunity to earn money.

 

 

The amount of money you can earn from intraday trading

 

 

The amount of money you can earn from intraday trading in the stock market cannot be determined precisely. It depends on various factors, including your knowledge, understanding, and experience in trading. Intraday trading, like any other form of trading, requires expertise and experience to be consistently profitable.

It is important to note that trading in the stock market involves risks, and there is always a possibility of incurring losses. Without proper knowledge and understanding of the market, it can be challenging to protect your capital.

Successful intraday traders often have years of experience and a deep understanding of market dynamics, technical analysis, risk management, and other relevant factors. They make informed decisions based on their expertise and have developed strategies to mitigate risks.

If you have the necessary knowledge, understanding, and experience, you can potentially earn profits from intraday trading. However, it is essential to continuously learn, adapt, and refine your trading strategies to stay ahead in the market.

It is advisable to approach intraday trading with caution and to start with a clear understanding of your risk tolerance and financial goals. It is recommended to seek guidance from financial professionals and consider proper risk management techniques to safeguard your capital.

 

Final thoughts

In recent times, there has been a growing craze for the stock market. During the time of the COVID-19 pandemic when people were confined to their homes and institutions were closed, the stock market continued to function as per its scheduled time. It is worth noting that while there was a sharp decline, certain sectors such as pharmaceuticals and IT companies were performing well. This period witnessed people earning significant profits from the rapidly fluctuating market.

The essence of the matter is that irrespective of the domestic or global situation, the stock market continues to operate at its designated time, whether it is moving downwards or upwards, offering opportunities to earn profits. However, engaging in this market requires knowledge, awareness, and expertise.

India is an emerging nation where the economy is progressively growing day by day. In the coming years, India's economy may surpass that of developed countries. Therefore, foreign investors are also attracted to this market. For instance, in the past, the Indian stock market experienced significant losses during market downturns. However, even during the adversity of the COVID-19 pandemic, the Indian market remained resilient, which can be attributed to the awareness and alertness of Indian investors.

You too can contribute to your own financial well-being and earn profits in your economy, but it is essential to exercise prudence, and understanding, and seek knowledge along the way.